Fake engine spruiker told to pay costs

Date: January 06 2013

Natalie O'Brien

A MAN who scammed investors with a fake magnetic engine and is now spruiking another impossible invention has been hit with a $300,000 bill for legal costs after being sued for misleading and deceptive conduct.

Micheal (also Michael) Peter Nugent and his now deregistered company, Cycclone Magnetic Engines, have been served with a court order to pay the costs of the corporate regulator which took action against them in the Queensland Supreme Court.

Mr Nugent, who operates in Lismore and the Gold Coast, was served with the order late last year. The costs order comes after the Australian Securities and Investments Commission (ASIC) launched an action in 2007 against Mr Nugent and Cycclone and the court found that Cycclone falsely claimed shares in the company were an investment in proven technology, and that Mr Nugent and Cycclone had presented a misleading business plan.

The court made injunctions stopping Cycclone Magnetic Engines from engaging in misleading or deceptive conduct by claiming the engine worked. It also stopped the company claiming that its shares would be an investment in proven technology.

Mr Nugent appealed, but the Queensland Court of Appeal confirmed in 2010 that he was guilty of misleading and deceptive conduct over the Cycclone Magnetic Engine.

It ruled his ''fuel-free'' engine - propelled by magnets - did not and could not work.

An ASIC spokesman said last week that it could not comment on the costs orders.

Mr Nugent told Fairfax Media that ''ASIC claimed $438,622.63 as costs. The court appointed an independent costs assessor and [the] final court order for costs is in fact $295,523.70.'' He said, ''No further comment will be made in regards to the costs.''

One of his investors contacted Fairfax by email to say ''the ASIC, plus these jerks [people who have tried to take over the company] and yourselves will no doubt rue the day that you decided to meddle with what will soon be the huge success story of 2013 on the OTCBB stock exchange [in the US]''.

Mr Nugent, who has been previously convicted of illegal fund-raising, and his long-time business associate, Robert (Bob) George McClelland, have been circulating information about a so-called Y Engine in the hope of raising $2 million.

Mr Nugent has set up new companies called Novagen Solar and Novagen Energy and has been promising the new engine will have potential applications in the industrial, marine, aerospace and automotive markets.

The Society of Automotive Engineers Australasia reviewed the photo of the engine and accompanying documents sent to potential investors and warned it contained ''strings of scientific jargon that might well impress someone with little background in the field''.

It said there there is a suspicious lack of detail and nothing to show it was a functional device.

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